Sharp Corp, Japan’s biggest LCD maker, said it was planning to reduce interest-bearing debt and collaborate with Hon Hai Precision Industry Co (鴻海精密) on smartphones in China as part of a plan to turn around.
The Osaka-based company plans to trim interest-bearing debt to ￥800 billion (US$8.8 billion) by September from the ￥1.1 trillion it had at the end of March, Sharp said in a statement in Tokyo yesterday.
Sharp is in talks with a client of Hon Hai regarding sales of panels and will transfer 1,300 employees to a separate LCD unit, the firm said.
President Takashi Okuda, 58, who took charge in April, is trying to turn around the company, in which Foxconn Technology Group (富士康科技集團) is buying a stake, after a record annual loss last year.
Hon Hai is a flagship firm of Foxconn group.
The new plan comes after the maker of Aquos TVs turned to Foxconn, the Taiwanese assembler of iPhones and iPads, and its founder Terry Gou (郭台銘) for ￥132.5 billion in investments.
Japanese consumer-electronics companies, including Sony Corp and Panasonic Corp, also reeling from record losses, have brought in new CEOs and announced plans to cut jobs amid increased competition with South Korean panel and TV makers.
Sharp and Foxconn agreed in March that Foxconn will buy a 9.9 percent stake in Sharp through a new share offering scheduled to be completed by March next year. Foxconn’s founder is investing ￥66 billion in Sharp’s biggest LCD plant, a separate transaction which is also closing in the coming 10 months.